I cover entrepreneurs, people who create value (and make money) out of the ideas in their heads. I spent three years on staff at Forbes before leaving to start Haymaker , a PR firm for startups, in May 2014. (Don't worry, I never write about my clients.) In the age of "The Social Network" myth, I get a kick out of delving into the reality of launching a business. Before joining Forbes I spent a year toiling in startup obscurity at Squidjob.com. Since my bedroom was the office, I never had to sleep under my desk. Comments, tips and forceful criticism are appreciated.

Hounded By Recruiters, Coders Put Themselves Up For Auction

When Pete London posted a resume on LinkedIn in December 2009, the JavaScript specialist stumbled into a trap of sorts. Shortly after creating a profile he received a message from a recruiter at Google. Just days later, another from Mozilla. Facebook reached out the next month and over the course of the next two years, nearly every big name in tech–Amazon, LinkedIn, Twitter, Adobe–messaged London in an attempt to lure him to a new employer. He received 530 messages in all, or one every 40 hours.

The only problem was that London didn’t exist. The fake profile was created by Elaine Wherry, a cofounder at Meebo, in a desperate effort to find recruiters to help triage her own talent issues. (The effort is described in a blog post here.)

Such is the sorry, frantic state of recruiting technical talent. “The demand for engineers far outstrips the supply,” says Matt Mickiewicz, the 29 year-old CEO of DeveloperAuction. “Good engineers are never unemployed and never seeking jobs.” The result is the Pete London experience: Any decent engineer gets hounded by packs of recruiters on a daily basis, meaning even tempting offers get lumped in with the spam.

From his perch in San Francisco, Mickiewicz, the cofounder of crowdsourcing site 99designs, observed this sordid phenomenon and decided to flip the equation. DeveloperAuction helps top coders see what they’re worth by broadcasting their resumes to 317 tech companies registered with the site–including Quora, DropBox and Facebook–in competitive, 14-day cycles. After companies make their offers, candidates are free to accept interviews or take in the numbers and pass. Last month’s crop of 88 engineers saw $30 million in job offers. (UPDATE: 153 engineers in the company’s October auction received $78 million in offers.)

Mickiewiz hopes the site will boost the top-end of developer salaries, which remain compressed in spite of high demand. Even inexperienced engineers can make $90,000, he says, but many of the best earn only $180,000 while adding multiples of value to their companies. He thinks that the entertainment industry, where the earnings spectrum spans five figures to eight, provides a better model.

The site charges employers 15% of each hire’s first-year salary, 20% of which they pass on directly to the recruits themselves. So if an engineer gets hired through the platform for $100,000, for example, DeveloperAuction takes a $15,000 fee, then cuts a $3,000 check directly to the new recruit. The company also accepts a 10% fee if employers throw in 10% the amount of stock options offered to new employees.

For each auction cycle, the company pares down an initial pool of applicants to surface the most promising talent. The most recent cycle, which ends today, required Mickiewicz & Co. to wade through 3600 developer applications. Just 153 made the final cut. In vetting candidates, the company looks for quality GitHub contributions, top-notch employers (Facebook, Apple, Twitter and Google employees get a leg up) and CS degrees from schools like Stanford and MIT. ”The challenge,” says Mickiewicz, “is finding unknown, talented employees and putting them on the same level as guys from Facebook.” For that the company is developing coding tests and puzzles to measure prospects independently of their resumes.

To scale up the vetting process, currently a manual endeavor, Mickiewicz, along with cofounders Douglas Feirstein and Allan Grant, are working on algorithms and predictive models built on hiring data from the site. As auction cohorts grow and more offers cross the platform, the company gets a better sense of the qualities that attract employers. Mobile developers, for example, garner more attention than PHP and ASP.NET coders, whose skill sets are waning in demand. By weighing factors like these to score applicants, the company hopes to automate the bulk of admissions to ease the way for scaling.

For now, DeveloperAuction is restricted to San Francisco, New York and Boston, owing to employers’ severe bias towards hiring locally. Next up: Seattle, Denver and London. The company also hopes to expand beyond engineering gigs to source candidates for web designers and data scientists. (Mickiewicz admits a bit of re-branding is in order.)

Run by a trio of veteran entrepreneurs – Feirstein created LiveOps while Grant spawned Curebit - the company is bootstrapped, though Mickiewicz says he’s had strong inbound interest from VC firms and angels. “Recruiting is an incredibly lucrative industry,” he says. “If we can fund this through cash flow that’s the best.” Yet, as I pointed out in a piece about Work4Labs, a company that helps corporations find wage-workers through Facebook, the race to create the next generation of online recruiting tools is increasingly competitive. Mickiewicz observed that there are 482 startups tagged with “Recruiting” or a similar term in CrunchBase. With the land grab on, he concedes that growth capital might make sense in a rush to claim market share.

Even so, the founder insists that DeveloperAuction is directly tackling a huge recruitment problem in lieu of playing around the edges with a SaaS service or vetting tool. Sourcing passive candidates, as LinkedIn does, yields success rates far lower than dealing with the active job-seekers found on DeveloperAuction, he argues.

Mickiewicz, whose disgust for conventional recruiters is palpable, is also toying with a new marketing idea: A recruiter blog of shame.

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I guess I got out just in time. I never cared much for a lot of testing for employment candidates. I didn’t care much for drug testing or checking credit. Far too much invasion of people’s private affairs. I always objected when my organization debated drug testing and checking credit reports for potential new hires. For over twenty years I hired coders based on their knowledge of the primary language, knowledege of how DP shops generally worked and most importantly their ability to think, visualize and develop and present. By paying attention and asking pertinent questions, I could usually pick the right one without much trouble. Then I kept up with those employees, even when they numbererd into the hundreds, I went by their offices to visit with them and kept up with them as much as possible. For the night shifts, I stayed overnight once a month and saw things for myself and heard complaints and so forth first hand.

I just see most organizations as not requiring sufficient hands on management from their managers and consequently spend a lot of money peering over their employees shoulders when their managers should be doing that job. If you can’t spend time with your employees, you ain’t a manager, just a higher paid employee.

As a tech worker with a current skillset on the rise, what I’m wondering is when is someone going to start paying me to share the knowledge that will help create the 6-7 people that are seemingly required on a daily basis to fulfill all the jobs I continuously get offers for.

The market seems pretty efficient now for the CS grad from a top school with a couple years at a top company. The new venture, or one like it, will pick up some crumbs by making a marginal improvement in efficiency.

The really inefficient market is the non-credentialed, those who have brains and have picked up knowledge on their own. This is the group from which an employer may be able to find an undervalued asset. There is big profit potential for helping employers sort through wheat from chaff. It’s much harder to make the evaluation, which is why the value creation is so much larger.